Do you want to ensure your debtors pay on time? Do you find yourself constantly pursuing debtors? Or maybe you’re just a beginner creditor looking for tips on the trade?
Either wayDo you want to ensure your debtors pay on time? Do you find yourself constantly pursuing debtors? Or maybe you’re just a beginner creditor looking for tips on the trade?, it is important you are informed of some strategies and tips on how you can ensure your debtors pay on time!
Remember of course to only consider strategies that apply to yourself or your business and always take specifics into account.
In this article our debt collectors provide 7 tips and tricks to ensure your debtors pay on time.
Ensure Your Debtors Pay on Time by Looking our for Bad Clients
When new people come to you looking to utilise your service it is important to critically consider what they would be like as a client and, more importantly, a debtor.
As much as you may think this process is unnecessary and a client is a client, this is generally not the case and failure to look for red flags in potential customers may lose you money in the long term.
For example, a client may state that you never carried out the promised service or they do not owe you any money at all.
This will likely harm your business by means of reputation damage and funds and time spent following up on such clients.
Some factors you may be looking to avoid in clients are poor organisation and time management, rude or aggressive attitude, overly argumentative on your prices, and many more!
Another way to ensure your debtors pay on time is to build relationships.
Build a Relationship with your Debtors
Creating a friendly relationship with your debtors is a great way to build your business and further your chances of receiving timely payments of debt.
You would be less likely to be of bother to a friend than to a stranger right? Of course, you would!
If you attempt to build a deeper relationship with your clients than simply creditor-debtor then it could genuinely benefit your business as a whole.
Clients will be more likely to prioritise repaying their debts to you and, if they are unable, to communicate issues with their finances.
They may also be more likely to recommend your business to loved ones, building your reputation and largening your clientele.
Creating a comfortable environment with clients may feel time-consuming and unnecessary, but it will likely be worth your while … within reason of course.
Another way to ensure your debtors pay on time is to send invoices in a timely manor.
Ensure Your Debtors Pay on Time by Sending Invoices on Time
It is vitally important to be organised as a creditor and send out invoices to debtors in a timely manner to avoid late payments!
Furthermore, sending out invoices late will likely result in issues with cash flow and overall poor business.
An easy way to ensure your invoices are sent out on time a large majority of the time is to outsource them.
This process involves sending your invoices to a company that focuses on mailing and printing aspects, allowing you to save time and money trying to pursue this yourself!
Not only will sending invoices on time benefit the time period it takes for debtors to pay debts, but it may also improve the income and efficiency of your business!
Remember, an investment in a business that specialises in the delivery of invoices may seem like an unnecessary cost, but professionals will generally have the means to do so effectively and save you money in the long term.
Another way to ensure your debtors pay on time is to ensure that you have a late-payment policy.
Make a Late Payment Policy
You may also want to consider putting in place a clear late payment policy that you are strict with following through on if needs be.
To be paid on-time more often than not, you may want to consider adding terms to the terms and conditions section of your contracts that clearly state the consequences of paying debts late.
Don’t be the creditor that hides these terms in the fine print though! It is wise to openly communicate these terms to clients, as they are more likely to be aware of and follow said requirements.
This can help prevent wasted time and money pursuing clients in the future for violating terms that they were not aware of!
These terms may include late payment fees to be added to debts or others similar to ensure customers are aware that late payment will be detrimental to their pockets!
Another way to ensure your debtors pay on time is to reward or discount early payment.
Ensure Your Debtors Pay on Time by Rewarding Early Payment
To encourage debtors to be efficient with repayment of debts, you may want to offer a reward if they return debts early. In the same way, you may enforce a late fee, you may want to consider the application of an early discount of sorts.
This may seem like a great way for your business to lose money, but it may be quite the opposite.
For starters, cash flow within your business will likely increase significantly with the potential increase in early payments from the offer of an early payment discount.
Clients may be less likely to ignore debts from your business, overall saving you money following up on late debts with your valuable time and resources.
The discount does not necessarily have to be large and can be just a little off of the top of their debts to encourage them to be timely with returning the money they owe to you.
Do however consider if this option is viable for your business as some may not be able to afford the costs of the discount.
Another way to ensure your debtors pay on time is to be flexible and earn trust.
Ensure Your Debtors Pay on Time by Being Flexible
When conversing with and following up on debtors, consider taking a flexible approach to the matter as it may be of benefit to all involved parties.
Flexibility is a great way to build business relationships and a level of trust between yourself and your debtors and may keep them coming back to your business whenever services you offer are needed.
You may want to be open to negotiation with clients on due dates of payments and, if viable for your business, possibly even debt amounts! This can keep all parties out of court, an instance that will likely be costly to you and take up significant time.
It may further allow clients to feel comfortable coming to you with relevant issues and possibly even recommending you to friends for your good-natured attitude!
However, try to avoid letting clients take advantage of your flexibility and stand firm on details you are certain must remain in place.
Another way to ensure your debtors pay on time is to make contact with debtors early.
Ensure Your Debtors Pay on Time by Making Contact
When attempting to recover debts from clients in the most time-efficient manner possible, it is vital that you continue contact between parties.
Contact is arguably one of the most important factors in collecting debt and can make or break your business!
Keep contact between yourself and your debtor polite and light-hearted; no one feels comfortable with an aggressive creditor. Utilise these conversations to remind them of the terms and of any action you intend to take if they violate them.
It is crucial however that you keep contact appropriate and do not violate any laws surrounding debt recovery, as this could get you in serious legal trouble!
You must also, of course, ensure that this person is liable for the said debt, as mistaking the individual can also land you in legal strife.
As always, keep contact consistent and, if all else fails, follow with expressed legal action if they ignore or refuse terms.
Ensure Your Debtors Pay on Time – Key Takeaways
Debt collection can be difficult and if you find yourself consistently struggling with it it may be time to switch up your approach.
Handling debtors often can be overly stressful and just a bothersome task overall, which is why it may be worth your while to apply some strategies now to save you the future headache!
If you remain unable to get clients to pay on time, however, consider seeking the help of a professional to get your business back on track.